Mobile money: Who wants it, who wants it

Only seven weeks on from the pre-budget report and, whilst there remains no black letter flesh to put on the bones of the skeletal announcements on residence, domicile, capital gains etc., it has been an eye-opener to see how quickly those in other countries have responded to the perception of weakness in the UK system. Based on the comments from professional contacts in other countries, the general impression overseas is that the UK is doing its best to give away its mobile foreign investment to whichever countries want it. When asked over why the apparent change of heart by a government which has long since been seen as aggressively trying to attract foreign investment, it is difficult to come up with an answer which is not met with derision.

Whilst some commentators are adamant that the proposals will make no difference to the UK, and others continue to speculate about the possible difference the proposals may make, the reality is that a change is already now taking place and with the long term foreign money beginning to flow out of the UK.

Curiously, it does not seem that those in the fortunate position to be wealthy, and international mobile in their perspective, have all of a sudden stopped seeing the advantages of a fragile economy with a bank run, overpriced residential and commercial property, an inferior infrastructure and a poorly educated workforce ! Nor is the attraction of the imminent end of the Bush administration and the weak US dollar proving a huge draw (not yet, anyway).

No, it is the mere uncertainty in the impending law changes which is the most cited factor in conversations, and especially amongst the non-dom business community. After all, is it not an inherent trait in all business people that they like to be in control of their destiny; why wait around to be pushed when you can take control and jump ? Advisers in other countries are doing a good job of exploiting this trait in not only promoting the comparative tax advantages offered by those countries but, moreover, emphasising the stability and certainty in the lawmaking and laws of those countries.

Where, so far, is proving popular as a possible alternative to the UK. In the EU, Holland, Spain and Belgium all offer tax breaks which are broadly analogous to the UK's current remittance basis. The Republic of Ireland has a tax code for non-doms which, for historic reasons, is very similar to the UK plus there is the added attraction of a very favourable inheritance tax regime for non Irish situs assets.

Elsewhere, the Swiss will offer a forfait if the money is right, but tax mitigation isn't everything and upping sticks to Switzerland does come with the embarrassment of losing all your "cool-wall" points when your friends find out your new next door neighbour is Phil Collins.